The right steps towards financial security

Beyond health, the pandemic has had another huge impact on people: careers and job security have been disrupted. Many jobs were lost as the economy collapsed, because companies downsized due to losses or because the WFH was not feasible. Others have kept their jobs, but without the assurance of keeping those jobs in the future.

This era of financial instability has highlighted the importance of investing at the right time and in the right way to ensure tax access when needed. Regularly investing a small amount of money can help you get secondary income when your regular income is not stable or is at risk. “Having the right asset allocation to match your risk profile can do wonders for your wealth building journey,” says CA Rishabh Parakh, founder of Money Plant Consultancy and author of Financial Spirituality.

Keeping liquid funds
“Always maintain a minimum of three months of income or salary in a liquid or short-term debt fund for rainy days,” says Saloni Parikh, expert at Miss Piggy Banks, a user-centric financial platform. This gives you easy access to money for medical or other emergencies if you cannot access your invested money for a while.

Go slowly and steadily
“Invest gradually; never invest all at once, especially at this level of the market, unless there is a huge opportunity in terms of a stock market crash, ”Parakh advises. “Otherwise, always invest in installments (ie portions). It also reduces the risk. “Invest in direct actions,” adds Parikh. She also notes that the volatility of the markets offers you many opportunities to build a solid portfolio and grow your wealth steadily. “Go for a SIP (Systematic Investment Plan) approach and be cautious and a little conservative.” A SIP is an investment option that works for the long term. Investing small amounts in low-risk mutual funds can help you achieve assured returns at the end of the term.

Start small, start young
“Start a SIP in an equity mutual fund that matches your financial goals and risk profile,” advises Rushika Sabnis, also an expert at Miss Piggy Banks. “There is no minimum age to start your SIP. You can start by investing small amounts and increase them as your income increases.

Insure for the future
“Use up to five percent of your savings for term and health insurance premiums,” Parakh explains. “Make sure you have good coverage suited to your financial goals. This ensures that you get a decent sum at the end of the term in terms of term insurance or, in the event of death, your nominee will receive the death benefit. Health insurance helps you when you need instant monetary help for medical reasons.

Finance

Be regular and careful
“First save, then invest regularly and prudently each month; try not to postpone it until the next month, ”Parikh advises. And don’t dive headlong into investing. First, try to save enough money over a period of time. When you have saved a decent amount of money, you can use some of it for investments. Study the types of investments available and see which ones are right for you. You can also seek professional help. Once you start investing, usually do so without missing any months, to ensure guaranteed returns.

Allocate wisely
“Plan your asset allocation, especially when it comes to equity investments,” Parakh explains. “If you’re in your 30s, a minimum of 50-60% can be invested in the stock market through a combination of blue chip stocks and mutual funds.” He also adds that you can use mutual funds for diversification. “Invest 10 to 15% of your savings in fixed capital instruments such as the Provident Fund, the Public Provident Fund, the National Pension Plan or mutual funds,” he advises. Building a good portfolio is essential for having good returns. Don’t put all of your eggs in one basket and make sure you take a systematic approach to investing instead of pooling everything together.

Follow the golden path
“Invest 10% of your investable funds in online gold exchange traded funds (ETFs). They are safe and act as a hedge against other asset classes, ”Sabnis informs. Gold ETFs track the price of physical gold, so you get an equivalent number of ETF units based on the current price of gold. When you sell them, the rate is the same as the current price at the time of the sale. “Avoid buying physical jewelry for investment purposes,” Parakh warns.

For the best return on investment, you should do the research yourself or with the help of a professional. Develop a strategy – plan and implement an appropriate investment plan. Keep the above points in mind when doing this. If you invest at the right time and with the right amount in the right investment option, you will get the best results.

Keep in mind …
Where and how much to invest is subjective. Don’t be fooled by what you read on and on social media unless you can establish the facts. It also depends on how much savings you have and how much you can use for investments. Start with smaller amounts of money, until you settle into a regular investing pattern. Once you have more funds available, you can increase the amount of the investment. Don’t put all of your investment in one option; look at different ones that may work for you. It is ideal to do the research on your own, and also seek professional help if necessary, to make the right financial decisions.

Read also : A Guide for Working Moms to Earn Financial Independence in 2021

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